PLEASANTON — With an eye toward preserving affordable housing, the city may impose new rules on landlords who want to convert their apartment complexes into condominiums.

Apartments for rent make up only about one-fifth of the citys housing stock, and a number of property owners have inquired about converting their rental units to condos.

With a median-priced condominium in Pleasanton now selling for $509,500, many apartment dwellers might not be able to afford to stay in their units if theyre converted to condos. If apartments become more scarce, that could also increase rents in Pleasanton.

On the other hand, the city is also looking for ways to encourage developers to build more affordable ownership housing. Unlike apartments, condos can help first-timehomeowners accumulate savings by building up equity in a home.

Allowing some apartments to be converted into condominiums might help the city meet state-mandated affordable housing targets, and increase the citys property tax base.

On Sept. 20, the City Council is scheduled to review a decades-old ordinance governing condo conversions.

To maintain a balance between rental and for-sale housing, the council could choose to place a cap on the number of apartments that can be converted into condos, said Planning Director Jerry Iserson. Livermore limits the number of condo conversions to 150 per year.

Pleasantons ordinance may also be amended to reflect state requirements that landlords provide displaced tenants with cash payments equal to two months rent to help them relocate.

The city already requires that developers of new townhome or apartment projects make 15 percent of the units available at below-market rates. But its not clear if that ordinance applies to condo conversions, Iserson said.

Should it choose to, the council could require that condo conversion projects set aside a percentage of units for sale at subsidized prices.

Although property owners in Hacienda Business Park are considering condo conversions, the city has only received one preliminary application to move forward with such a project.

That application was filed by Charles Clark, who plans to convert the 51-unit Pleasanton Manor apartments on Mohr Avenue to condos.

If the project is approved, Clark anticipates hell have to make a percentage of the condos available for sale at subsidized rates. Hes also prepared to provide displaced tenants with two months rent — if they agree to move out within two weeks of a target date.

Clark, who bought Pleasanton Manor last year for $8 million, said the complex needs substantial work. Rather than a condo flip, he said, his plans amount to a redevelopment project.

Built in 1972, the complex is just falling apart. Its one of the worst Ive seen, Clark said. The plumbing, electrical — you name it, it really needs a major rehab. To rehab it for apartments just doesnt pencil out.

The complex houses a diverse range of tenants, from Spanish-speaking families with young children to at least one resident of more than 20 years. None of those contacted by the Herald were aware of plans to convert their apartments to condos.

Rick Diefenderfer, an 18-year-old Safeway checker, said hes lived in the complex for 18 months with his mother, sister and a 3-month year old baby.

Wed probably all be moving out, he said if their $1,050-a-month apartment is converted to a condominium.

Jim Jones, a 61-year-old dry wall installer, said he paid $650 a month for his two-bedroom apartment when he moved into the complex in 1983. Although his rent is now $1,250, Jones said hes happy renting. He likes the apartments location, near downtown and shops.

Ive enjoyed it, thats the main reason I havent left, Jones said.

Clark said he hasnt informed current tenants of his plans because work wont begin for months — if the city approves the project.

The city will require that tenants be notified when Clark files his final application.

Clark said he expects it will take the city four to eight months to update its condo conversion ordinance, and he wont file his final application until the city has made it clear what the rules governing the project will be.

Clark said he hopes to complete the project and offer units for sale within two years.